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Question 38 Chapter 1 of +2-Part-1
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38. (I & EA/c/ Donation/ B/S/ Opening Fund Required/ GST) Following is the Receipts and Payments Account of Our Paradise Club for the year ending 31st March 2017:
| RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March 2017 | |||
| Receipts | Rs. | Payments | Rs. |
| Cash in hand | 50 | Salaries | 2,400 |
| Cash at bank | 565 | Rent | 720 |
| Subscriptions(Including Rs.100 for 2015-16 and Rs.150 of 2017-18) | Postage | 30 | |
| 4550 | Printing and Stationery | 255 | |
| Interest on Investments | 2,000 | Electricity Charges | 300 |
| Bank Interest | 25 | Meeting Expenses | 150 |
| Sale of Furniture | 300 | Purchase of library books | 1,000 |
| Investments in Bonds | 1,000 | ||
| Cash in hand | 155 | ||
| Cash at Bank | 1,480 | ||
| 7,490 | 7,490 | ||
The following additional information is supplied to you:
1) On 1st April 2016, the Club had the following assets and liabilities:
a) Investments costing Rs.40,000, (b) Furniture Rs.3,000, (c) library books Rs.5,000.
b) Liability for rent Rs.60 and for salary Rs.200
2) On 31st March 2017, rent of Rs.80 and Salary of Rs.250 were in arrear. Arrear of Rent is subject to levy of CGST & SGST @ 9% each.
3) The book value of the Furniture was Rs.250.
Prepare the Income and Expenditure Account of the Club for the year ending 31st March 2017 and the Balance Sheet as on that date.
The solution of Question 38 Chapter 1 of +2 Part-1: –
| Income and Expenditure account of Paradise Club For the year ending 31st March 2017 | |||||
| Expenditure | Amount | Income | Amount | ||
| To salaries | 2,400 | By subscriptions | 5,000 | ||
| Add: outstanding | 250 | Less: Received for 2015-16 | 100 | ||
| Less: Paid for the previous year | 200 | 2,450 | Received for 2017-18 | 150 | 4,300 |
| To rent | 720 | By interest on investments | 2,000 | ||
| Add: Outstanding | 80 | By bank interest | 25 | ||
| Less: Paid for the previous year | 60 | 740 | By profit on sale of furniture | 50 | |
| To postage | 30 | ||||
| To printing and stationary | 255 | ||||
| To Electricity Charges | 300 | ||||
| To Meeting Expenses | 150 | ||||
| To excess of income over expenditure (Surplus) | 2,450 | ||||
| 6,375 | 6,375 | ||||
| Balance Sheet As on 31st March 2017 | |||||
| Liabilities | Amount | Assets | Amount | ||
| Outstanding Expenses : | Cash in hand | 155 | |||
| – Rent | 94.40 | Cash at Bank | 1,480 | ||
| – Salary | 250 | 344.40 | Investments | 40,000 | |
| Subscription received in advance | 150 | Add: Purchased now | 1,000 | 41,000 | |
| Capital Fund: | Furniture | 3,000 | |||
| – Opening Balance | 48,455 | Less: Sold | 250 | 2,750 | |
| Add: Surplus | 2,450 | 50,905 | Library books | 5,000 | |
| Add : Purchased Now | 1,000 | 6,000 | |||
| Input CGST | 7.20 | ||||
| Input SGST | 7.20 | ||||
| 51,399.40 | 51,399.40 | ||||
Working Note:
1. Opening Capital Fund:
| Balance Sheet As on 1-4-2016 | |||||
| Liabilities | Amount | Assets | Amount | ||
| Outstanding Expenses : | Cash in hand | 50 | |||
| – Rent | 60 | Cash at Bank | 565 | ||
| – Salary | 200 | 260 | Outstanding Subscriptions | 100 | |
| Capital Fund (Balancing Figure) | 48,455 | Investments | 40,000 | ||
| Furniture | 3,000 | ||||
| Library Books | 5,000 | ||||
| 48,715 | 48,715 | ||||
2) Treatment of Outstanding Rent
For outstanding rent adjustment entry will be:
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| Particulars | L.F. | Debit | Credit | |
| Rent a/c | Dr. | 80 | ||
| Input CGST a/c (9% of 80) | Dr. | 7.20 | ||
| Input SGST a/c (9% of 80) | Dr. | 7.20 | ||
| To Outstanding Rent a/c | 94.40 | |||
O/S rent Rs. 80 is added in Income and Expenditure Account in Figure of rent paid. Input CGST & Input SGST of Rs. 7.20 each will be shown as current assets and O/S rent of Rs. 94.40 will be shown as a current liability on the balance sheet.
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Also, Check out the solved question of previous Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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